How is poverty measured?

Poverty is measured in the United States by comparing a person’s or family’s income to a set poverty threshold or minimum amount of income needed to cover basic needs. People whose income falls under their threshold are considered poor.

The U.S. Census Bureau is the government agency in charge of measuring poverty. To do so, it uses two main measures, the official poverty measure and the Supplemental Poverty Measure, both of which are described in this FAQ.

Official Poverty Measure

The Census Bureau determines poverty status by using an official poverty measure (OPM) that compares pre-tax cash income against a threshold that is set at three times the cost of a minimum food diet in 1963 and adjusted for family size.

The OPM uses calculations of these three elements—income, threshold, and family—to estimate what percentage of the population is poor.

The official poverty estimates are drawn from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), which is conducted in February, March, and April with a sample of approximately 100,000 addresses per year.

In 2016, the most recent year for which data are available, the OPM national poverty rate was 12.7 percent. There were 40.6 million people in poverty.

The CPS ASEC questionnaire asks about income from more than 50 sources and records up to 27 different income amounts. Income is defined by the OPM to include, before taxes, the following sources:

The OPM does not include as income noncash government benefits such as Supplemental Nutrition Assistance Program (SNAP) benefits and housing assistance.

Poverty thresholds, the minimum income needed to avoid poverty, are updated annually for inflation using the Consumer Price Index , and adjusted for family size, composition, and age of householder.

OPM thresholds do not vary geographically.* In 2016, the OPM poverty threshold for a family of four was $24,339.

Poverty thresholds serve different purposes, including tracking poverty over time, comparing poverty across different demographic groups, and as the starting point for determining eligibility for a range of federal assistance programs.

(To learn more about using the poverty thresholds, or their administrative counterpoint, the poverty guidelines, for determining program eligibility, see FAQ: What are poverty thresholds and poverty guidelines? )

* The Census Bureau cautions that the thresholds should be interpreted as a “statistical yardstick” rather than as a complete accounting of how much income people need to live. They were intended to define and quantify poverty in America and to record changes in the number of persons and families in poverty and their characteristics over time.

Family is defined by the OPM as a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption who reside together. All such people (including related subfamily members) are considered as members of one family.

In 1959, when the official government poverty series began, poverty was estimated at 22 percent. Before that time, unofficial estimates by researchers found a poverty rate in 1914 of 66 percent; 78 percent in 1932; 32 percent in 1947; and 24 percent in 1958.**

Figure 1 shows more recent poverty rates, in 1968, 1990, and 2016, by age, race, and Hispanic origin, using the OPM.

Figure 1. Official U.S. poverty rates in 1968, 1990, and 2016 show variation by age and racial/ethnic group and over time

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** R. D. Plotnick, E. Smolensky, E. Evenhouse, and S. Reilly, “The Twentieth-Century Record of Inequality and Poverty in the United States,” in The Cambridge Economic History of the United States, Vol. 3, eds. S. L. Engerman and R. E. Gallman (Cambridge: Cambridge University Press, 2000), 249-299; G. Fisher, “Estimates of the Poverty Population under the Current Official Definition for Years before 1959,” mimeograph, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, 1986.

The Census Bureau releases the results of their analysis using the OPM every year in a report called Income and Poverty in the United States . The report includes charts and tables on information such as the following:

To learn more about the official poverty measure, see the Census Bureau discussion, “How the Census Bureau Measures Poverty,” and the infographic, “ How Census Measures Poverty .”

Researchers and policymakers have long called for changes to the official poverty measure for a number of reasons. However, in spite of its shortcomings, detailed below, its salience in policymaking is noted by the economists Bruce D. Meyer and James X. Sullivan:

Few economic indicators are more closely watched or more important for policy than the official poverty rate. The poverty rate is often cited by policymakers, researchers, and advocates who are evaluating social programs that account for more than half a trillion dollars in government spending.

Principal criticisms of the OPM include:

While the official measure remains the official national poverty statistic, the Census Bureau has been estimating poverty using a number of experimental measures as well, since the mid-1990s. See Poverty: Experimental Measures on the Census Bureau’s website for more about these approaches.

The most recent and prominent experimental measure, the Supplemental Poverty Measure—a work-in-progress that supplements but does not replace the official measure—is discussed below.

Supplemental Poverty Measure

The Census Bureau introduced the Supplemental Poverty Measure or SPM in 2010 to provide an alternative view of poverty in the United States that better reflects life in the 21st century, including contemporary social and economic realities and government policy.

As its name suggests, the SPM supplements but does not replace the official poverty measure, which remains the nation’s source for official poverty statistics and for determining means-tested program eligibility.

In a side-by-side comparison of the official poverty measure and the SPM, the Census Bureau notes their differences in measurement units, poverty threshold, threshold adjustments (e.g., by family size), updating thresholds, and what counts as resources, summarized in Table 3 below.

Source: L. Fox, “The Supplemental Poverty Measure: 2016,” Current Population Reports P60-261 (RV), Revised September 2017.

Note: “Family” as defined by the Census Bureau is “a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption and residing together; all such people (including related subfamily members) are considered as members of one family.”

A comparison of official and SPM poverty rates in 2016 for the total population and among three age groups: under age 18, adults ages 18 to 64, and elders age 65 and over, is shown in Figure 2.

For most groups, SPM poverty rates were higher than official poverty rates; children are an exception with 15.2 percent poor using the SPM and 18.0 percent poor using the official measure. Analysts attribute the lower SPM child poverty rate largely to the measure’s inclusion of noncash benefits such as Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) benefits.

The much higher SPM poverty rates for people age 65 and older—14.5 percent vs. 9.3 percent using the OPM—partially reflect that the official thresholds are set lower for families with householders in this age group, while the SPM thresholds do not vary by age.

In addition, the SPM rate is higher for people age 65 and older because it includes out-of-pocket medical expenditures, which are typically high for the elderly, whereas the official measure does not take them into account.

Figure 2. Poverty rates using OPM and SPM measures for total population and by age group, 2016, show a higher OPM child poverty rate and higher SPM elderly poverty rates.

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2.1 The Measurement and Extent of Poverty

Learning objectives.

When US officials became concerned about poverty during the 1960s, they quickly realized they needed to find out how much poverty we had. To do so, a measure of official poverty, or a poverty line , was needed. A government economist, Mollie Orshanky, first calculated this line in 1963 by multiplying the cost of a very minimal diet by three, as a 1955 government study had determined that the typical American family spent one-third of its income on food. Thus a family whose cash income is lower than three times the cost of a very minimal diet is considered officially poor.

This way of calculating the official poverty line has not changed since 1963. It is thus out of date for many reasons. For example, many expenses, such as heat and electricity, child care, transportation, and health care, now occupy a greater percentage of the typical family’s budget than was true in 1963. In addition, this official measure ignores a family’s noncash income from benefits such as food stamps and tax credits. As a national measure, the poverty line also fails to take into account regional differences in the cost of living. All these problems make the official measurement of poverty highly suspect. As one poverty expert observes, “The official measure no longer corresponds to reality. It doesn’t get either side of the equation right—how much the poor have or how much they need. No one really trusts the data” (DeParle, et. al., 2011). We’ll return to this issue shortly.

A hill full of trailer homes

The poverty line is adjusted annually for inflation and takes into account the number of people in a family: The larger the family size, the higher the poverty line. In 2010, the poverty line for a nonfarm family of four (two adults, two children) was $22,213. A four-person family earning even one more dollar than $22,213 in 2010 was not officially poor, even though its “extra” income hardly lifted it out of dire economic straits. Poverty experts have calculated a no-frills budget that enables a family to meet its basic needs in food, clothing, shelter, and so forth; this budget is about twice the poverty line. Families with incomes between the poverty line and twice the poverty line (or twice poverty ) are barely making ends meet, but they are not considered officially poor. When we talk here about the poverty level, then, keep in mind that we are talking only about official poverty and that there are many families and individuals living in near poverty who have trouble meeting their basic needs, especially when they face unusually high medical expenses, motor vehicle expenses, or the like. For this reason, many analysts think families need incomes twice as high as the federal poverty level just to get by (Wright, et. al., 2011). They thus use twice-poverty data (i.e., family incomes below twice the poverty line) to provide a more accurate understanding of how many Americans face serious financial difficulties, even if they are not living in official poverty.

The Extent of Poverty

With this caveat in mind, how many Americans are poor? The US Census Bureau gives us some answers that use the traditional, official measure of poverty developed in 1963. In 2010, 15.1 percent of the US population, or 46.2 million Americans, lived in official poverty (DeNavas-Walt, et. al., 2011). This percentage represented a decline from the early 1990s but was higher than 2000 and even higher than the rate in the late 1960s (see Figure 2.1 “US Poverty, 1959–2010” ). If we were winning the war on poverty in the 1960s (notice the sharp drop in the 1960s in Figure 2.1 “US Poverty, 1959–2010” ), since then poverty has fought us to a standstill.

Figure 2.1 US Poverty, 1959–2010

Data from the US Census Bureau on US Poverty, 1959-2010

Source: Data from US Census Bureau. (2011). Historical poverty tables: People. Retrieved from .

Another way of understanding the extent of poverty is to consider episodic poverty , defined by the Census Bureau as being poor for at least two consecutive months in some time period. From 2004 to 2007, the last years for which data are available, almost one-third of the US public, equal to about 95 million people, were poor for at least two consecutive months, although only 2.2 percent were poor for all three years (DeNavas-Walt, et al., 2010). As these figures indicate, people go into and out of poverty, but even those who go out of it do not usually move very far from it. And as we have seen, the majority of Americans can expect to experience poverty or near poverty at some point in their lives.

The problems in the official poverty measure that were noted earlier have led the Census Bureau to develop a Supplemental Poverty Measure . This measure takes into account the many family expenses in addition to food; it also takes into account geographic differences in the cost of living, taxes paid and tax credits received, and the provision of food stamps, Medicaid, and certain other kinds of government aid. This new measure yields an estimate of poverty that is higher than the rather simplistic official poverty measure that, as noted earlier, is based solely on the size of a family and the cost of food and the amount of a family’s cash income. According to this new measure, the 2010 poverty rate was 16.0 percent, equal to 49.1 million Americans (Short, 2011). Because the official poverty measure identified 46.2 million people as poor, the new, more accurate measure increased the number of poor people in the United States by almost 3 million. Without the help of Social Security, food stamps, and other federal programs, at least 25 million additional people would be classified as poor (Sherman, 2011). These programs thus are essential in keeping many people above the poverty level, even if they still have trouble making ends meet and even though the poverty rate remains unacceptably high.

A final figure is worth noting. Recall that many poverty experts think that twice-poverty data—the percentage and number of people living in families with incomes below twice the official poverty level—are a better gauge than the official poverty level of the actual extent of poverty, broadly defined, in the United States. Using the twice-poverty threshold, about one-third of the US population, or more than 100 million Americans, live in poverty or near poverty (Pereyra, 2011). Those in near poverty are just one crisis—losing a job or sustaining a serious illness or injury—away from poverty. Twice-poverty data paint a very discouraging picture.

Key Takeaways

For Your Review

DeNavas-Walt, C., Proctor, B. D., & Smith, J. C. (2011). Income, poverty, and health insurance coverage in the United States: 2010 (Current Population Reports, P60-239). Washington, DC: US Census Bureau.

DeParle, J., Gebeloff, R., & Tavernise, S. (2011, November 4). Bleak portrait of poverty is off the mark, experts say. New York Times , p. A1.

Pereyra, L. (2011). Half in Ten campaign criticizes House Republican funding proposal . Washington, DC: Center for American Progress.

Sherman, A. (2011). Despite deep recession and high unemployment, government efforts—including the Recovery Act—prevented poverty from rising in 2009, new census data show . Washington, DC: Center on Budget and Policy Priorities.

Short, K. (2011). The research supplemental poverty measure: 2010 (Current Population Reports, P60-241). Washington, DC: US Census Bureau.

Social Problems by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

Poverty: Causes and Reduction Measures

Measurements of poverty, causes of poverty, poverty reduction measures.

The eradication of extreme poverty by the year 2015 was one of the millennium development goals that the United Nations member states committed to, during the signing of the United Nations Millennium Declaration. While many countries have made significant progress toward the attainment of the goal, many are still struggling with poverty. Approximately 10 percent of the global population live in extreme poverty while about 50 percent survive on less than $2.50 a day (Atkinson, 2019). This means that poverty is a global disaster and that a large percentage of the population has insufficient income or material possessions to satisfy their basic needs. Governments and non-governmental organizations do their best to fight poverty. However, more needs to be done, especially in developing countries where poor governance, corruption, and political instability impede the war against extreme poverty.

Poverty is defined as the inability to earn sufficient income and possess productive resources to sustain one’s livelihood. It manifests in various ways, including hunger, poor health, limited access to basic human needs, and social discrimination (Ravallion, 2016). The term “poverty” can be used differently, depending on the context. Absolute poverty is characterized by scarcity and suffering. People in this group barely have access to shelter, food, and decent housing (Mood & Jonsson, 2015). Relative poverty is viewed as a social construct, and therefore, it is a measure of income inequality. People in this group can meet their basic needs, but fail to fulfill the requirements for median income classification. Their earnings are insufficient for them to afford the average standard of living as defined in their society or country.

According to the World Bank’s 2017 statistics, more than 736 million people lived below the international poverty line, meaning that they survived on less than $1.9 a day (as cited in Atkinson, 2019). In 2018, approximately 8 percent of the working population lived in extreme poverty. Roughly 10 percent of the population cannot afford to meet their basic needs such as access to health care, proper sanitation, and education (Atkinson, 2019). Research studies conducted to evaluate the effect of conflict on poverty have revealed that by year 2030, approximately 75 percent of the world’s extremely poor population will be living in conflict-affected situations (Atkinson, 2019). This means that despite the ongoing efforts to eliminate severe poverty, the situation could deteriorate if governments do not address the issue of conflict and political instability.

Poverty is not only present in developing regions such as Africa and Asia, but also in developed countries such as the United States, France, and the United Kingdom. The US is a developed nation, and therefore wealthy, based on international standards. However, occurrences such as the Great Depression and the Great Recession have ensured that poverty constantly afflicts a portion of its population. For instance, 38 million Americans live in poverty, which means that their annual income falls below the $25,750 mark (Atkinson, 2019). The concept of poverty is defined differently in various societies, and is dependent primarily on one’s income level.

The main causes of poverty include lack of education, inequality and marginalization, political instability, conflict, lack of infrastructure, and inadequate access to clean water and food. Political instability and conflict cause displacement that force people to abdicate their assets in search for peace. Moreover, wars lead to massive destruction of property and infrastructure. For example, around 70 percent of Syria’s population live in extreme poverty, even though poverty levels were very low prior to the conflicts (Mood & Jonsson, 2015). Gender, economic, and social inequality creates unequal access to resources, thus denying some people the opportunity to improve the quality of their lives. Lack of education is another cause of poverty. The United Nations Educational, Scientific and Cultural Organization (UNESCO) argues that the possessions of basic reading skills could help more than 170 million people to eradicate extreme poverty in their lives. Climate change is a critical issue that has adverse effects. For instance, it has the potential to cause flooding and drought, both of which can have adverse effects on agriculture (Mood & Jonsson, 2015). The World Bank has stated that climate change has the potential to push 100 million people into poverty in the next decade if mitigation measures are not put in place. Poor infrastructure limits access to healthcare facilities, markets, and social amenities, and isolates certain populations (Ravallion, 2016). Isolation limits access to opportunities, thus keeping people in poverty.

One of the goals of the 2030 Agenda for Sustainable Development is the eradication of poverty in all its forms. In that regard, this will be attained through the mobilization of resources that will facilitate the implementation of programs and policies in order to promote poverty eradication. Poverty can be eradicated through the creation of sound policy frameworks that promote equal access to resources and opportunities for advancement (Heshmati, 2017). Equality and representation for all would ensure that all groups participate in decision-making processes and present their ideas on matters of national importance. Governments should invest more in infrastructure, increase access to education, and improve access to clean water, food, and security (Heshmati, 2017). Proper governance is another solution to ending poverty. This means the elimination of war, conflicts, and corruption, and the creation of jobs.

In developing economies, more engagement in trade, the creation and implementation of economic development policies, and increased access to education and health care are important. Studies have indicated that a 10 percent increase in a nation’s average income has the potential to alleviate poverty by about 20 percent (Heshmati, 2017). Trade is a key factor in the growth of any economy. Therefore, governments should enter into trade partnership with other countries, support local businesses that export products and services, and encourage direct foreign investment (Ravallion, 2016). In countries like the US, poverty can be eradicated by creating more employment opportunities, increasing access to health care, and fighting vices like racism, gender inequality, and sex-based discrimination. It is important for the government to ensure that all people enjoy equal access to resources and services (Heshmati, 2017). For example, limited access to medical care affects the productivity of the people, and thus, keeps poor people poor.

Poverty is a global challenge that has adverse effects. Billions of people live below the international poverty line and struggle to meet their basic needs. Many countries, especially in developing economies have made significant progress with regard to eradicating extreme poverty. However, more needs to be done because the situation could get worse if corruption, poor governance, and political instability persist. Poverty can be reduced through increased access to opportunities, resources, and social amenities, elimination of poor leadership, creation of more jobs, and the development of better infrastructure. Moreover, it is important for governments to facilitate trade, create and implement policies that promote equality, and provide quality health care and education to citizens.

Atkinson, A. B. (2019). Measuring poverty around the world . Princeton University Press.

Heshmati, A. (Ed.). (2017). Economic transformation for poverty reduction in Africa: A  multidimensional approach . Taylor & Francis.

Mood, C., & Jonsson, J. O. (2015). “The social consequences of poverty: An empirical test on longitudinal data.” Social Indicators Research, 127 (1), 633-652.

Ravallion, M. (2016). The economics of poverty: History, measurement, and policy . Oxford University Press.

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357 Poverty Essay Topic Ideas & Examples

Students who learn economics, politics, and social sciences are often required to write a poverty essay as part of their course. While everyone understands the importance of this topic, it can be hard to decide what to write about. Read this post to find out the aspects that you should cover in your essay on poverty.

🏆 Best Poverty Topics & Free Essay Examples

👍 powerful topics on poverty and inequality, 🎓 simple & easy topics related to poverty, 📌 interesting poverty essay examples, ⭐ strong poverty-related topics, 🥇 unique poverty topics for argumentative essay, ❓ research questions about poverty, 💯 free poverty essay topic generator.

Topics, related to poverty and inequality, might seem to broad. There are so many facts, factors, and aspects you should take into consideration. However, we all know that narrowing down a topic is one of crucial steps when working on outline and thesis statement. You should be specific enough to select right arguments for your argumentative essay or dissertation. Below, you will find some aspects to include in your poverty essay.

Poverty Statistics

First of all, it would be beneficial to include some background information on the issue. Statistics on poverty in your country or state can help you to paint a picture of the problem. Look for official reports on poverty and socioeconomic welfare, which can be found on government websites. While you are writing this section, consider the following:

Causes of Poverty

If you look at poverty essay titles, the causes of poverty are a popular theme among students. While some people may think that poverty occurs because people are lazy and don’t want to work hard, the problem is much more important than that. Research books and scholarly journal articles on the subject with these questions in mind:

Consequences of Poverty

Many poverty essay examples also consider the consequences of poverty for individuals and communities. This theme is particularly important if you study social sciences or politics. Here are some questions that may give you ideas for this section:

Government Policies

Governments of most countries have policies in place to reduce poverty and help those in need. In your essay, you may address the policies used in your state or country or compare several different governments in terms of their approaches to poverty. Here is what you should think about:

Solutions to Poverty

Solutions to poverty are among the most popular poverty essay topics, and you will surely find many sample papers and articles on this subject. This is because poverty is a global issue that must be solved to facilitate social development. Considering these questions in your poverty essay conclusion or main body will help you in getting an A:

Covering a few of these aspects in your essay will help you demonstrate in-depth understanding and analysis required to earn a high mark. Before you start writing, have a look around our website for more essay titles, tips, and interesting topics!

IvyPanda. (2023, February 1). 357 Poverty Essay Topic Ideas & Examples.

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  1. Measuring Poverty Overview

    Measuring Poverty. The World Bank Group’s mission is to end extreme poverty and promote shared prosperity. In order to monitor progress and understand the types of poverty reduction strategies that could work, it is important to measure poverty regularly. The international poverty line is set at $2.15 per person per day using 2017 prices.

  2. How is poverty measured?

    Poverty is measured in the United States by comparing a person’s or family’s income to a set poverty threshold or minimum amount of income needed to cover basic needs. People whose income falls under their threshold are considered poor. The U.S. Census Bureau is the government agency in charge of measuring poverty.

  3. 2.1 The Measurement and Extent of Poverty

    Write a short essay that summarizes the problems by which the official poverty rate is determined. Sit down with some classmates and estimate what a family of four (two parents, two young children) in your area would have to pay annually for food, clothing, shelter, energy, and other necessities of life. What figure do you end up with?

  4. Poverty: Causes and Reduction Measures

    Causes of Poverty. The main causes of poverty include lack of education, inequality and marginalization, political instability, conflict, lack of infrastructure, and inadequate access to clean water and food. Political instability and conflict cause displacement that force people to abdicate their assets in search for peace.

  5. 357 Poverty Essay Topics & Free Essay Examples

    Aspects to Cover in a Poverty Essay Students who learn economics, politics, and social sciences are often required to write a poverty essay as part of their course. While everyone understands the importance of this topic, it can be hard to decide what to write about.